Crash Course in Accounting and Financial Statement Analysis, Second Edition

Summary: Assets

Assets represent the company’s resources, which must have value, be measurable and of quantifiable cost, and be company owned (Exhibit 6.11). Assets are recorded at their historical (acquisition) cost on the balance sheet, in-line with the conservatism principle.

Exhibit 6.11. Company Assets Typically Consist of (But are Not Always Limited to):

Cash and Cash Equivalents	Money held by the company in its bank accounts
Marketable Securities (Short-Term Investments)	Debt or equity securities held by the company
Accounts Receivable	Payment owed to a business by its customers for products and services already delivered to them
Inventories	Represent any unfinished or finished goods that are waiting to be sold, and the direct costs associated with the production of these goods
Property, Plant and Equipment (Fixed Assets)	Land, buildings, and machinery used in the manufacture of the company’s services and products
Goodwill and Intangible Assets	Non physical assets such as brands, patents, trademarks, and goodwill acquired by the company that have value based on the rights belonging to that company
Deferred Taxes	Potential future tax savings arising when taxes payable to the IRS are higher than those recorded on financial statements
Other (Miscellaneous) Assets	Items that do not fit into other categories, such as pre paid expenses, or some types of short-or long-term investments

Current assets are expected to be convertible into cash within 12 months and include accounts receivable, inventory, ...